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Repubicans consider short-term debt ceiling increase

SHUTDOWN SHOWDOWN: U.S. Senate Majority Leader Harry Reid (D-NV) gathers with other Democratic Party senate members on the steps of the U.S. Capitol in Washington, Oct. 9, 2013. Photo: Reuters/REUTERS/Jason Reed

By David Lawder and Richard Cowan

WASHINGTON (Reuters) – U.S. House of Representatives Republicans are considering signing on to a short-term increase in the government’s borrowing authority to buy time for negotiations on broader policy measures, according to a Republican leadership aide.

How long the increase might suffice – a few weeks or a few months – was unclear. But agreement by Republicans and Democrats to raise the debt ceiling would at least stave off a possible default after October 17, when Treasury Secretary Jack Lew has determined the government will no longer be able to borrow.

President Barack Obama has said he would accept a debt ceiling increase of limited duration as long as no strings were attached, except perhaps a non-binding agreement to discuss policy issues.

It was unclear Wednesday night how far Republicans might be prepared to go to meet Obama’s conditions. Republicans in the House have been demanding a variety of conditions – including changes to Obama’s healthcare law – in return for cooperating on the debt ceiling and on a funding measure that might reopen the government, which has been partially shut down since October 1.

In recent days, however, Republican emphasis has shifted more toward deficit reduction measures and less to Obamacare, the health care law.

Republicans in particular and Congress in general have taken a public beating in the showdown, with an Associated Press-Gfk survey on Wednesday showing Congress as a whole at a rock-bottom 5 percent approval rating. More than six of every 10 Americans blamed Republicans for the impasse.

Republican leaders plan to make remarks to reporters on Thursday at 11 a.m. EDT but it was uncertain whether they would be prepared to unveil anything concrete then. The party’s leadership has proven unable to control rebellious conservatives in the House, who have sufficient power to squelch any deal they dislike.

FIRST FACE-TO-FACE TALKS

With pressure rising and no clear path forward for breaking their fiscal impasse, Obama launched a series of White House meetings with lawmakers on Wednesday to search for a way to end a government shutdown and raise the debt limit.

House Democrats journeyed to the White House to discuss the fiscal stalemate, and Senate Democrats and Republican leaders in the House of Representatives will make separate treks on Thursday amid rising worries about the potential for economic havoc in the crisis.

The depth of the dispute was evident, however, in the failure of Obama and House Speaker John Boehner to even agree on a guest list for their Thursday session.

The White House invited all House Republicans, but Boehner limited the visitors to 18 party leaders and prominent committee chairs, lessening Obama’s exposure to Republicans who might dissent from the leadership’s hard-line strategy and to rank-and-file Tea Party members who inspired it.

White House spokesman Jay Carney said Obama was “disappointed” at the truncated guest list because “the president thought it was important to talk directly with the members who forced this economic crisis on the country.”

The impasse has shut the government for nine days and rattled financial markets with the threat that the country’s $16.7 trillion borrowing limit will not be raised before the October 17 deadline.

Republican Tea Party fiscal conservatives precipitated the crisis by demanding that Obama’s healthcare reform law be delayed or curtailed in exchange for approving the funding of government operations and raising the debt ceiling.

But in a shift some Republicans hope will strengthen their hand in the fight, the party’s House leaders have played down demands to weaken the healthcare law and focused instead on calls to rein in deficits.

House Majority Leader Eric Cantor and Paul Ryan, the House Budget Committee chairman and former vice presidential candidate, both published opinion pieces focused on tackling long-term debt and deficits instead of the healthcare law.

The White House meeting with House Republicans will be the first face-to-face talks between Obama and his political adversaries since last week, although lawmakers have informally been exploring possible compromises and ways to resolve the stalemate.

Republican senators on Wednesday were considering a proposal by Senator Susan Collins of Maine that would reopen the government and increase the borrowing authority while repealing an unpopular medical device tax designed to finance subsidies under the healthcare law.

Collins’ plan also would give federal agencies flexibility in dealing with across-the-board spending cuts that kicked in earlier this year and are opposed by many members of Congress.

After a meeting of Republican senators, John McCain of Arizona called her initiative “a pretty good proposal that some of us like,” and a Senate Republican aide said there are discussions about possibly incorporating a short-term debt limit increase into the measure.

“We continue to talk. No progress, but there never is until you reach a breakthrough,” McCain told reporters “I’m not saying that we will ever reach a breakthrough. I’m saying conversations are going on. I hope that they reach some conclusion. I’m not sure whether they will or not.”

‘THEY’RE NOT GETTING ANYTHING’

All 200 House Democrats were invited to the afternoon session at the White House, and Democratic leaders said most made the trek. They said Obama was resolute about not negotiating with Republicans until they drop their demands.

Democratic House Leader Nancy Pelosi said House Democrats had not seen a short-term proposal for funding the government and lifting the debt ceiling from Republicans and would not make any concessions to get one.

“The debt ceiling needs to be lifted. They’re not getting anything for that. And we haven’t seen an offer on that,” she said.

Obama scolded Republicans on Tuesday for demanding negotiations, but said he would talk about anything including the healthcare law if Republicans re-opened the government and lifted the debt ceiling even for the short term.

Boehner rejected Obama’s demands as “unconditional surrender,” but other Republicans have showed a willingness to consider a short-term deal if there was a framework in place for negotiations.

Those hopes were fueled by the opinion columns on Wednesday, particularly Ryan’s column urging a negotiated end to the stalemate but did not mention Republican demands for linking changes in the federal healthcare law with government funding.

“I am beginning, by the way, to be a little hopeful regarding our current situation. It looks like the House is beginning to focus on the right things,” Republican Senator Bob Corker of Tennessee said on CNBC, pointing to Ryan’s column.

But Boehner took to the House floor on Wednesday to reiterate Republican demands that the healthcare law be part of the broader discussions.

“Our message in the House has been pretty clear. We want to reopen our government and provide fairness to all Americans under the president’s healthcare law,” Boehner said.

World Bank President Jim Yong Kim added his voice to a chorus of experts warning about the impact of the stalemate, saying on Wednesday that even the threat of a U.S. default could hurt emerging markets and the world’s most vulnerable people.

“We’re very concerned. Because right now there’s so many headwinds as it is for emerging markets and the developing world, that kind of impact really could be devastating,” Kim told CNN.